Backup, Netbooks, the Education Market, and the “Backup Tax”

Will the backup industry be able to continue over-charging for each computer they support as the price of computers, led by Netbooks, continues to plunge?

DisplaySearch, an NPD Group Inc. analyst firm, recently reported that unit shipments for Netbooks were up 103% in 2009 to $11.4B (all portable hardware sales were $109B.) DisplaySearch calls for a 19% increase in unit shipments in 2010 with flat overall revenue growth due to falling ASPs.

I talk to quite a few customers and resellers, and what they’re telling me is that they’re seeing particularly heavy adoption in the education backup market – in particular, in K12. Education backup has its own unique characteristics; with deeper netbook adoption I’d expect to see even greater differentiation since post-secondary education backup portable devices tend to be higher-end notebooks. This make s sense to me – and I’m looking forward to see what Apple’s iPhone/iPod tablet (the iSlate or whatever it will be called) will do within this market as well.

There are some backup vendors starting to jump on the bandwagon. Acronis, for example, has recently begun advertising that it has a version of its backup software that is lower priced than the than normal based (and is based on its imaging-based product.)

Of course, every time a vendor touts how low their prices are on a per-agent basis, it always makes me smile. I believe that backup agents should be free. Period. Don’t understand why it is that backup vendors believe that they have the right to charge someone for something that people don’t want anyway. No one wants to buy a backup agent – what people want to buy is the protection of their systems and data.

Of course, the nickel and diming of customers in the industry (which I also sometimes call the “backup tax”), is pretty well an established fact. Not only are there per-agent costs, but all too many vendors separate their offering not only per-agent but by functionality as well. Thus you get into situations where you pay money for your Windows file agent, your Windows BareMetal backup agent, your Windows Exchange Server backup agent, your Windows SQL Server backup agent, and so on, and so on, and so on.

I’m a capitalist, so I guess I think it’s great that backup vendors like Acronis and Symantec and so many others being able to get people to shovel money at them for all of this. But I don’t think it can go on forever – and I think that things like Netbooks are one of the reasons why. In any case, with netbook prices falling while the unit shipments continue to rise, what backup vendors are going to discover is that their policy of charging for backup agents is an evolutionary cul de sac.

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